Profit

Five-Year Tax-Saving Fixed Deposit: Interest Rates, Investment Limits And Other Key Details

A special type of term deposit or fixed deposit (FD) is eligible for deduction under the ambit of Section 80C.

 Share
EMAIL
PRINT
COMMENTS
Five-Year Tax-Saving Fixed Deposit: Interest Rates, Investment Limits And Other Key Details

FD interest rates: Investment in the five-year income tax-saving FD is eligible for the 80C tax benefits


Section 80C of the Income Tax Act offers deduction of up to Rs 1.5 lakh from taxable income in a year. A variety of investments, such as premium paid towards life insurance and contribution to a Public Provident Fund (PPF) Account, are eligible for the income tax benefit offered under Section 80C. A special type of term deposit or fixed deposit (FD) is also eligible for deduction in taxable income under Section 80C. A five-year time-deposit small savings scheme account in the post office is also eligible for Section 80C benefits. (Also read: You need to furnish these additional details in new income tax return forms)

Here are five important things to know about the five-year term deposit or fixed deposit (FD) accounts which offer income tax benefits:

Income tax-saving FD: Interest rates

Major banks today - from state-run State Bank of India (SBI) to private sector peers HDFC Bank and ICICI Bank - pay the following interest rates on the five-year, tax-saving fixed deposits, according to their websites.

BankInterest rate
General publicSenior citizen
State Bank of India6.85%7.35%
Punjab National Bank6.25%6.75%
India Post (five-year TD small savings scheme)7.80%7.80%
HDFC Bank7.25%7.75%
ICICI Bank7.25%7.75%
(Source: Bank, India Post websites)

Income tax-saving FD: Premature withdrawal

Also known as a tax-saving fixed deposit or tax-saving FD, this account allows a minimum maturity period of five years and a maximum of 10 years. That means the deposit is locked-in for a period of five years.

FD interest rate, FD interest rate list, FD interest rates in SBI, ICICI FD interest rates, SBI FD interest rates, HDFC Bak FD interest rates, fixed deposit rates in post office, post office FD interest rate, 5-year FD interest rate in post office, bank FD rate, bank FD rate of interest, bank FD rate 2019, bank FD rate compare, bank FD rate list, bank FD rates all banks

Lenders do not allow a premature withdrawal from this type of FD accounts before completion of the lock-in period of five years.

Income tax-saving FD: Lock-in period

Investment in these fixed deposits - tax-saving FDs - is locked in for a period of five years from the date of issue, which means the investor cannot withdraw money during this period in order to utilize the tax benefit.

Income tax-saving FD: Investment limit

A maximum investment of Rs 1.5 lakh in a financial year is allowed in income tax-saver five-year fixed deposit.

SBI allows a minimum deposit of Rs 1,000 for investment in its tax-saving scheme, according to the bank's corporate sites - sbi.co.in. Any amount in the multiple of Rs 1,000 not exceeding Rs 1.5 lakh a year is allowed by the bank.



Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.

NDTV Beeps - your daily newsletter

................................ Advertisement ................................

................................ Advertisement ................................

................................ Advertisement ................................

Top